CHENNAI: Murugappa Group Chairman A Vellayan chastised the Congress-led UPA and all but supported BJP's prime ministerial candidate Narendra Modi in a rare instance of political candour from a conservative business family.

In an exclusive interview to ET, the chairman of the Rs 22,500-crore group, with marquee companies such as fertiliser maker Coromandel International and sugar producer EID Parry, said the UPA government had announced many well-intentioned policies but did not implement them.

"I think the real issue to my mind is that the past 9-10 years of UPA have been, especially their second innings, a bit of disaster for the Indian industry," said Vellayan, 61. "The first culprit has been the half-baked policies," he added.

He said manufacturing as a percentage of GDP has fallen to less than 14% in India. "Any emerging economy, unless you are in excess of 26%, it's not a good sign."

Murugappa, one of India's oldest business houses, was set up in 1900 and has 28 companies in various sectors, including fertilisers, sugar, engineering and financial services.

Eleven of its group companies are listed on Indian bourses.

Fertiliser and sugar sectors face a lot of interference from the government in terms of policies and subsidies.

Vellayan, who belongs to the fourth generation of the Murugappa family, said going by what he saw in Gujarat and the company's experiences in creating businesses there, he felt that a Modi government at the Centre would be a positive for the economy.

"Because he (Modi) has proved albeit be in one state. He has displayed capability and stamina to sustain what he is doing, not over one period but three periods," said Vellayan. "He seems to have energy levels to take it forward. And I think at the moment he is clearly the prime ministerial candidate."

Vellayan said one of the main issues that industry in India faced was the free trade agreements that the country had signed with several countries. "It (FTA) is done quite mindlessly. There is no coordination between ministries."

Giving an example of the auto components sector, he said the FTA with Thailand was hurting the segment. He said domestic manufacturers just couldn't compete with the foreign players.

Vellayan said this was only one instance of the issues faced by the manufacturing sector. "The cost structure for manufacturers has gone up because of local taxes, power cost, environment clearance, (and) because of so many things."